Question 1

In what way would apples be better than diamonds as a medium of exchange?

Accepted Answer

Apples are divisible.

Question 2

Why would silver dollar coins be a better store of value than gold bars?

Accepted Answer

The coins would have a minimum value of a dollar, while the gold bars have no such guarantee.

Question 3

Cigarettes are an example of _____ money.

Accepted Answer

A)  commodity 
B)  fiat 
C)  representative 
D)  none of the above 
A)  commodity 
B)  fiat 
C)  representative 
D)  none of the above A

Question 4

Is a bank with the following balance sheet engaged in fractional reserve banking?

Accepted Answer

No. The sum of the d

Question 5

Rocks would not make very good money because they are not easily

Accepted Answer

A)  divisible. 
B)  uniform. 
C)  portable 
D)  all of the above. 
A)  divisible. 
B)  uniform. 
C)  portable 
D)  all of the above.

Question 6

A disadvantage of credit money is that prices do not automatically adjust to changes in the money supply.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is/are desirable attributes of a medium of exchange?

Accepted Answer

A)  edibility 
B)  elasticity of demand 
C)  divisibility 
D)  all of the above 
A)  edibility 
B)  elasticity of demand 
C)  divisibility 
D)  all of the above

Question 8

Why do economists say that money helps to increase specialized production?

Accepted Answer

Trade is more difficult in a barter econ

Question 9

Which of the following is/are desirable attributes of a medium of exchange?

Accepted Answer

A)  the ability to carry it 
B)  there is a relatively fixed amount available 
C)  it is difficulty to break up 
D)  all of the above 
A)  the ability to carry it 
B)  there is a relatively fixed amount available 
C)  it is difficulty to break up 
D)  all of the above

Question 10

IOUs for gold deposits are one example of commodity money.

Accepted Answer

A) True 
 B)False

Question 11

If an economy is using a medium of exchange that has an inelastic supply, how do prices change in an economic recession? Why?

Accepted Answer

Prices rise in a recession sin

Question 12

What effect would the introduction of fraction reserve banking have on the money supply?

Accepted Answer

A bank that issues m

Question 13

During a hyperinflation, money is not functioning well as a

Accepted Answer

A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above. 
A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above.

Question 14

Checking accounts are part of the money supply defined by M0.

Accepted Answer

A) True 
 B)False

Question 15

Only fiat money helps solve the "double coincidence of want" problem.

Accepted Answer

A) True 
 B)False

Question 16

How can adoption of a foreign currency help during the collapse of a local currency?

Accepted Answer

Adoption of a foreign currency

Question 17

The best medium of exchange combines:

Accepted Answer

A)  divisibility 
B)  durability 
C)  portability 
D)  all of the above 
A)  divisibility 
B)  durability 
C)  portability 
D)  all of the above

Question 18

Money

Accepted Answer

A)  is anything generally accepted for trade. 
B)  does not have to be valuable except as a means of trade. 
C)  can allow people to save more easily. 
D)  all of the above. 
A)  is anything generally accepted for trade. 
B)  does not have to be valuable except as a means of trade. 
C)  can allow people to save more easily. 
D)  all of the above.

Question 19

Fiat money is representative money, but the converse is not necessarily true.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following invest in short-term, or money market, instruments?

Accepted Answer

A)  sweep accounts 
B)  ATS accounts 
C)  money market mutual funds 
D)  all of the above 
A)  sweep accounts 
B)  ATS accounts 
C)  money market mutual funds 
D)  all of the above

Exam 3: Money

In what way would apples be better than diamonds as a medium of exchange?

Why would silver dollar coins be a better store of value than gold bars?

Cigarettes are an example of _____ money.

Is a bank with the following balance sheet engaged in fractional reserve banking?

Rocks would not make very good money because they are not easily

A disadvantage of credit money is that prices do not automatically adjust to changes in the money supply.

Which of the following is/are desirable attributes of a medium of exchange?

Why do economists say that money helps to increase specialized production?

Which of the following is/are desirable attributes of a medium of exchange?

IOUs for gold deposits are one example of commodity money.

If an economy is using a medium of exchange that has an inelastic supply, how do prices change in an economic recession? Why?

What effect would the introduction of fraction reserve banking have on the money supply?

During a hyperinflation, money is not functioning well as a

Checking accounts are part of the money supply defined by M0.

Only fiat money helps solve the "double coincidence of want" problem.

How can adoption of a foreign currency help during the collapse of a local currency?

The best medium of exchange combines:

Money

Fiat money is representative money, but the converse is not necessarily true.

Which of the following invest in short-term, or money market, instruments?

The Financial System

Interest Rates

The Economics of Interest-Rate Fluctuations

The Economics of Interest-Rate Spreads and Yield Curves

Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

Financial Structure, Transaction Costs, and Asymmetric Information

Bank Management

Innovation and Structure in Banking and Finance

The Economics of Financial Regulation

Financial Derivatives

Financial Crises: Causes and Consequences

Central Bank Form and Function

The Money Supply Process and the Money Multipliers

Monetary Policy Tools

Monetary Policy Targets and Goals

Foreign Exchange

International Monetary Regimes

Money Demand

Is-Lm

Is-Lm in Action

Aggregate Supply and Demand and the Growth Diamond

Monetary Policy Transmission Mechanisms

Inflation and Money

Rational Expectations Redux: Monetary Policy Implications

Filters

Is a bank with the following balance sheet engaged in fractional reserve banking? $Is a bank with the following balance sheet engaged in fractional reserve banking?$